Keywords
Summary

Keywords

1. Free movement of capital — Restrictions — Obstacles resulting from privileges retained by the Member States in the management of privatised undertakings — Justification — System of property ownership — No justification — (Arts 56 and 295 EC)

2. Free movement of capital — Restrictions — National rules laying down a system of prior administrative approval in respect of certain decisions by commercial undertakings — Not permissible — Justification based on grounds of public security — No justification — (Arts 56 EC and 58(1)(b) EC)

Summary

1. Concerns which, depending on the circumstances, may justify the retention by Member States of a degree of influence within undertakings that were initially public and subsequently privatised, where those undertakings are active in fields involving the provision of services in the public interest or strategic services, cannot, however, entitle Member States to plead their own systems of property ownership, referred to in Article 295 EC, by way of justification for obstacles, resulting from privileges attaching to their position as shareholder in a privatised undertaking, to the exercise of the freedoms provided for by the Treaty, such as the free movement of capital between Member States. That article does not have the effect of exempting the Member States' systems of property ownership from the fundamental rules of the Treaty.

see paras 66-67

2. A Member State which maintains in force national rules submitting to prior administrative approval the decisions of commercial undertakings relating to:

─ the undertaking's winding-up, demerger or merger;

─ the disposal or charging of the assets or shareholdings necessary for the attainment of the undertaking's object;

─ a change in the undertaking's object;

─ dealings in the share capital involving the disposal or acquisition of shares, which result in the State's shareholding being reduced,

fails to fulfil its obligations under Article 56 EC.

Such rules constitute a restriction on the movement of capital for the purposes of Article 56 EC. The fact that the restrictions on the acquisition of shares apply without distinction to both residents and non-residents does not mean that they fall outside the scope of Article 56 EC, since they affect the position of a person acquiring a shareholding as such and are thus liable to deter investors from other Member States from making such investments and, consequently, to affect access to the market.

Furthermore, no justification for such rules can be accepted. Although, in that respect, the objective of safeguarding supplies of petroleum or electricity supplies and of ensuring a minimum level of telecommunications services in the event of a crisis, within the Member State concerned, may constitute a public-security reason and, therefore, justify an obstacle to the free movement of capital, such rules go beyond what is necessary to attain that objective, since they do not provide any objective and specific criteria such as to allow review of the exercise of the particularly broad discretion enjoyed by the administrative authorities.

see paras 54, 59, 61-62, 65, 71, 73, 76, 79-80, 84, operative part